Minna Halme: Solutions to Global Sustainability Problems through Responsibility Innovations
Solutions to globalsustainability problemsthrough responsibilityinnovationsMinna Halme15.4.201316.4.2013
• Sustainability challenges as a starting point for innovation• How is sustainability entrepreneurship different fromconventional entrepreneurship?• What resources are needed for starting a sustainabilityenterprise?• Examples now and future16.4.2013Outline
Sustainability ChallengesA Systems OverviewEnergyextractionNon-renewableresourcesWaterBiodiversitySoilDeforestationPollutionAtmospherePopulationInequalityPovertyClimatechangeFood16.4.2013Minna Halme JOC
Responsibility types in businessResponsibility typePhilanthropy Integration InnovationDimensionofactionRelationship to corebusinessOutside of firm’s corebusinessClose to existing corebusinessEnlarging corebusiness ordeveloping newbusinessTarget of responsibility Extra activities Environmental andsocial performanceof existing businessoperationsNew product, serviceor business modelExpected benefit Image improvement andother reputation impactsImprovements ofenvironmental andsocial aspects ofcore businessBusiness opportunityfor now & futureExample Microsofts softwaredonations for charitygroups.Merck employees buildtimber houses forpoverty-stricken peopleCertifying facilities withe.g. ISO14001 orSA8000Zero carbon energytechnologies;Inclusive business andeco-efficientservice businessmodelsHalme, M and Laurila, J (2009) Journal of Business Ethics, 84: 325-33916.4.2013Minna Halme JOC
Taking a sustainability challenge as a startingpoint of innovationEnergyextractionNon-renewableresourcesWaterBiodiversitySoilDeforestationPollutionAtmospherePopulationInequalityPovertyClimatechangeFood16.4.2013Minna Halme JOC
Conventional and sustainabilityentrepreneurshipConventionalentrepreneurshipSustainability entrepreneurshipMain goal Create economic value (i.e.earn money)Contribute to solvingenvironmental and socialproblems and create economicvalue (earn money)Role ofeconomicgoalsEnds Means and endsRole of non-economicgoalsNone beyond legalrequirementsEnvironmental and social goals asendsOrganizationaldevelopmentchallengeEconomic growth From focus on sustainabilityissues to integrating economicissues16.4.2013Minna Halme JOCAdapted from: Belz & Binder (2013) Sustainabilityentpreneurship: A Pcocess Model. Paper presented at AaltoUniversity CESR seminar on March 15 & Schaltegger and Wagner(2011) Business Strategy & the Environmentl, 20(4): 222-237
Generic model of entrepreneurialprocess16.4.2013Minna Halme JOC Source: Shane, 2003
Model of sustainabilityentrepreneurial process16.4.2013Minna Halme JOC Source: Belz & Binder (2013) Sustainability entpreneurship: APcocess Model. Paper presented at Aalto University CESRseminar on March 15.
Findings from sustainabilityinnovations’ study16.4.2013Minna Halme JOCProfit asa goalFinProfit asa meansSocial impactas a meansSocial impactas a goalThe MissionaryBusinessProfit fromPrinciplesSocial PurposeBusiness
• PROBLEM: Subsistence entrepreneurs havetoo little money or can’t get bank loans.• SOLUTION: MyC4 is a microfinance bankoperating through the internet since 2007.• MyC4 grants loans to small enterprises in Africancountries• Investors are individuals and organizations in developedcountries.• Each investor can choose the loan recipient, followhow the enterprise succeeds and can also give advice.• Local ”providers” in Africa screen prominententrepreneurs.• REVENUE MODEL: MyC4 charges a 6%interest fee on the loans when they are repaid.• OUTCOME: Over 19,000 investors from 115countries have invested over €15 millionthrough the MyC4 website. Over 8,000businesses in seven African countries havebeen funded.Microfinance over the internet
Presentation name andauthor - 4/26/201312Clewer – clean water• Sustainability innovation: Leapfrogtechnology that can purify toxics fromwaste water with help of precisionbacteria. Can purify nitrogen fromwaste water in all temperatures above+3 C, and could be of majorimportance in combating theeutrophication of the Baltic Sea. 90%less energy consumption to next bestcompetitor.Figure. Researchers visit Muurala waste water treatmentplant. In the forefront small part of the traditional waterpurification system, at the back Clewer purificationprocess, which takes only about 5-10% of the size of thetraditional system.
What resources do startingsustainability entreprises typicallyneed?16.4.2013Minna Halme JOCSource: Halme & Korpela (2013) Scarcity or abundance? Anexamination of resources behind responsible innovation in NordicSMEs. Forthcoming in Best Paper Proceedings of the Academy ofManagement 2013 and Business Strategy and the Environment.FinancialcapitalCapabilities Social capital ReputationalassetsEquityLiabilitiesIndustry knowledgeIntellectual PropertyRights (IPR)NetworksR&D cooperationReputation
• Yes– In the sample of 13 Nordic small sustainability enterprises, themost scarcely resourced ones started with only equity and R&Dcooperation– Proposition: For a scarcely resourced enterprise, equity and R&Dcooperation appear necessary resources for commercializing asustainability innovation– Why these? Sustainability innovators can compensate lack ofresources by cooperation with external parties (customers orother stakeholders).– MyC4 and Zealand Care• And no – see the next slide16.4.2013Minna Halme JOCCan you set up a sustainabilityenterprise with scarce resources?Source: Halme & Korpela (2013) Scarcity or abundance? Anexamination of resources behind responsible innovation in NordicSMEs. Forthcoming in Best Paper Proceedings of the Academy ofManagement 2013 and Business Strategy and the Environment.
• We compared technology, business model and designbased sustainability innovations• Sustainable business model innovations require lessresources than technology innovations• For technology-based sustainability innovations industryknowledge appers an igniting resource. Entrepreneursneed it to access other resources, which are in turn neededto make the tech-innovation into a commercial offering.• Advice to resource-poor wanna-be sustainabilityentrepreneurs: head for a business model innovation16.4.2013Minna Halme JOCSource: Halme & Korpela (2013) Scarcity or abundance? Anexamination of resources behind responsible innovation inNordic SMEs. Forthcoming in Best Paper Proceedings of theAcademy of Management 2013 and Business Strategy and theEnvironment.Resource needs vary betweensustainability innovation types
16.4.2013Minna Halme JOCHow to change the world –students’business models
• Professor Minna Halme, firstname.lastname@example.org• http://management.aalto.fi/en/research/groups/responsibility/• http://management.aalto.fi/en/research/groups/bop/• http://www.aaltoglobalimpact.org/• https://people.aalto.fi/index.html?language=english#minna_halme16.4.2013Minna Halme JOCThank you!